UPDATE 1-Capita 2018 pretax profit down 26 pct, seen flat in 2019

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LONDON, March 14 (Reuters) - British business services group Capita posted a 26 fall in 2018 profit before tax on Thursday and a sluggish pipeline of new orders evidenced a difficult economic climate as it overhauls its business.

Capita was nevertheless upbeat, having slightly beaten its own guidance, and CEO Jon Lewis said the group was on track to achieve its 2020 target of double-digit margins. Profit before tax was 282.1 million pounds ($374.3 million) versus a target of 250-275 million pounds.

Revenues fell 5 percent to 3.87 billion pounds and its order book shrank to 7.1 billion pounds at 31 December, from 8.2 billion pounds a year earlier, particularly hit by life insurance and local government services.

Capita, which provides services to both the public and private sectors, also set a flat profit target for 2019 as Chief Executive Jon Lewis simplifies and pares down the administration services group whose complex structure had become unprofitable.

“While there are early signs that we can make real progress in 2019, there is still much more to do; and we must demonstrate that we can again grow organically,” Lewis said.

Amongst a broad array of business services Capita recruits staff for the British army and provides customer services to FirstGroup railways and retailer Marks & Spencer. It also manages alerting and messaging for emergency services and the licence fee for public broadcaster the BBC. ($1 = 0.7537 pounds) (Reporting by Elisabeth O’Leary, Editing by Paul Sandle and Kirsten Donovan)